Sunday, January 9, 2011



This week's post is contributed by marketing consultant John A. Murphy. -- PWH

A serious mistake managers often make when planning to engage the services of a marketing consultant is to insist upon previous industry-specific experience. This article will explain why such experience is of minimal value to the client (as well as the consultant) and often, even DANGEROUS for the client.

At the outset, an important distinction needs to be made between “industry specific experience” and “industry specific knowledge.” It might be a valuable exercise to ask: “What is it I expect a marketing consultant with “industry specific experience” to bring to the equation besides marketing capabilities?”

You should expect such a person to be familiar with the “key players” (competitors, customers and distribution chains-where applicable). She should also have a handle on industry trends (e.g. technological developments/innovations through trade associations, government contacts, industry “gurus” and trade press) and she should have an historical knowledge of how the macro environment (e.g. inflation, trade policy, etc.) affects the industry.

The truth is, after you meet with a consultant and she endeavors to understand your problems and expectations, she should return not only ready to make an “abstract” marketing proposal as to how she can meet your expectations, but she must do so in the context of such “industry specific” knowledge. Note, I said KNOWLEDGE, not experience.

How does the consultant come by such knowledge without corresponding experience? This is part of the “stock-in-trade” of the consultant. Secondary marketing research is a basic skill of everyone in the marketing profession. We all know how to check with the Commerce Department, trade associations, trade press and the basic library business indices, or turn on our computers and enter an electronic data base. We also know enough to call a few competitors and customers to get an even better feel for what is going on.

What we do not try to do is become a technical expert on the design or application of the devices a given company may manufacture. Odd as it may seem, the actual device that a company makes is not the first concern of a marketing expert. Remember, R&D, engineering and production are concerned with making devices; marketing, however, makes the product, and it is the product, not the device, that customers purchase.

Furthermore, one of the major reasons to engage someone from outside the company and industry is for their OBJECTIVITY. A “marketing consultant” with prior industry-specific experience runs a DANGEROUS RISK for the client in two ways:

First, the consultant’s previous “pertinent experience” may have dulled his/her objectivity. She may often have the tendency to shoot from the hip using a gun loaded with “instant answers.” Familiarity may breed not only contempt but also marketing myopia. Second, years of “industry specific experience” often comes at the expense of a depth in MARKETING experience. The trade-off is usually in the form of “doing the right thing” for “doing things right”. Of course, in marketing no room exists for such a trade-off. Yet such trade-offs are often made when one is focused on the present and not the future (in terms of profitability performance).

A case in point should illustrate this clearly: When Apple Computer needed to replace Steve Jobs, they did not tap IBM, HP, TI or even Tandy. They did not even go to industry-allied companies like Intel or NEC. In fact, they went to a company not even considered to be part of the “high-tech” culture. They took John Sculley from Pepsi! Mr. Sculley knew little about computers going in, but he was quite an accomplished MARKETING expert.

[Note: In the opinion of many Apple fans, Scully took Apple down the wrong path. Nevertheless, John’s point is well taken. Under Scully, Apple was more profitable than it is now. –PH]

Another, perhaps more down-to-earth, reason why a marketing consultant avoids “industry-specific experience” can be illustrated by the following scenario: A marketing consultant is engaged by company “A” in the “XYZ” industry, completes the assignment and then is engaged by company “B” a direct competitor of company “A”. (The consultant now has full knowledge of financial and trade secrets.) Company “B” might think it is about to get one up on its competitor until it realizes that it will be in the same position should the consultant return to company “A” or be engaged by yet another competitor.

The marketing consultant is aware of this dilemma and assiduously avoids it (nondisclosure contracts notwithstanding). The marketing consultant thus realizes that too much experience in any given industry could be the “kiss of death” for his own business.

A final word about Industrial Marketing Consultants and marketing expertise. All marketing consultants develop their expertise by specializing in certain areas of marketing — industrial, consumer, or the service

industry. Sometimes their field may be quite narrow; e.g., mergers/acquisitions, personnel, marketing information systems, etc. Within all areas of specialties there is, however, a shared expertise. All need to know certain fundamentals, on the one hand: how to conduct the market audit, fully understand the fine points of “OBJECTIVE/STRATEGY/TACTIC” – the dialectical nature of the marketing process. On the other hand they also need to have such expertise in operational activities as when to use tools like conjoint analysis or multi-dimensional scaling, even which algorithm within these “tools” will yield the best results. Moreover, the Marketing expertise of the consultant should be revealed by his membership in such professional associations as the certifying body called “The Institute of Management Consultants” as well as the “American Marketing Association” and the “American Management Association.”

What I am saying, essentially, is this: a truly professional marketing consultant would never, by definition, also be an expert in a specific industry.—John A. Murphy

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